China National Offshore Oil Corporation (CNOOC) is the third-largest national oil company in China, after CNPC (parent of PetroChina), and China Petrochemical Corporation (parent of Sinopec). It focuses on exploration and development of crude oil and natural gas offshore of China. CNOOC Group is owned by the government, and its subsidiary, CNOOC Ltd is listed in Hong Kong. Another subsidiary, China Oilfield Services, is listed in Hong Kong and New York. In July 2012, CNOOC announced an agreement to acquire Nexen, a Canadian oil and gas company, for approximately US$15.1 billion.


CNOOC invites foreign firms to explore for oil in deep-sea blocks

CNOOC invites foreign companies to bid for more areas - including in the South China Sea - with some near, but not in, disputed areas

PUBLISHED : Wednesday, 29 August, 2012, 12:00am
UPDATED : Wednesday, 29 August, 2012, 9:26am

Top offshore oil producer CNOOC is inviting foreign companies to explore for oil and gas in another 26 blocks, including 22 in the South China Sea, although an analyst said none of these were in disputed territory.

Experts said the tender, which also covers blocks in the Bohai Sea off north China and in the East China Sea, was probably the largest offered by China National Offshore Oil Corp (CNOOC) since the 1990s - a sign that the oil giant wants to boost exploration as its output growth slows.

The tender comes two months after CNOOC invited international firms to bid for nine blocks in the western part of the South China Sea, a move Vietnam said was illegal as the blocks encroached on its territorial waters.

China at the time insisted the tender in June was in accord with Chinese and international law and urged Vietnam not to escalate the quarrel.

Huang Xinhua, a geologist at energy consultancy IHS, said none of the latest blocks appeared to be in disputed areas.

One of the blocks is in northern Bohai Bay, with three in the East China Sea, 18 in the eastern part of the South China Sea and four in the western South China Sea, the company said on its website They cover a total area of 73,754 square kilometres.

The three deep-water blocks in the eastern part of the South China Sea are at depths between 700 and 3,000 metres, it said, adding that foreign firms had until November 30 to view data packages for all the blocks tendered.

"The tender should be CNOOC's largest in terms of the number of blocks offered since the 1990s, showing CNOOC really wants to beef up its exploration in offshore China with the help of international firms," Huang said.

The three deep-sea blocks, which cover a total of 15,365 square kilometres, as well as areas in the Qiongdongnan basin in the western part of the South China Sea, were attractive as hardly any drilling had been carried out there so far, Huang said.

In this round of auctions, block 65/12 is near block 65/24, which Vietnam singled out in a March as violating its sovereignty. The area sits one nautical mile from the Paracel Islands, which China and Vietnam fought over in 1974. China calls them the Xisha Islands and Vietnam calls them the Hoang Sa Islands.

"China must assert its sovereignty over these blocks as preliminary geological assessments suggest huge oil and gas exploration potential," said Gordon Kwan, the Hong Kong-based head of regional energy research at Mirae Asset Securities. "China's rising global dominance can fend off any political or military challenges that could come" because of the new tenders.

Reuters, Bloomberg



Send to a friend

To forward this article using your default email client (e.g. Outlook), click here.

Enter multiple addresses separated by commas(,)

Related topics

For unlimited access to: SCMP Tablet Edition SCMP Mobile Edition 10-year news archive